Psychiatrist Charged with Conspiracy to Illegally Market the Prescription Medication Xyrem, Also Known as "Ghb," for Unapproved Medical Uses on Behalf of its Manufacturer

FOR IMMEDIATE RELEASE

April 05, 2006

Nationwide Scheme Also Sought Unlawful Reimbursements from Public and Private Health Insurers

An indictment was returned today in U.S. District Court in Brooklyn, New York, charging the
defendant PETER GLEASON, a psychiatrist, with federal crimes arising from his participation in
a nationwide scheme to unlawfully promote the medication Xyrem, also known as sodium
oxybate and gamma-hydroxybutyrate (“GHB”), to prescribing physicians for non-approved
medical purposes and concealing those purposes from health insurers.1
The indictment further
alleges that the defendant was paid tens of thousands of dollars by Xyrem’s manufacturer in
furtherance of this scheme. Specifically, GLEASON was charged with introducing a misbranded
drug into interstate commerce, health care fraud, and conspiracy to commit those offenses.

The indictment was announced by ROSLYNN R. MAUSKOPF, United States Attorney for the
Eastern District of New York, KIM A. RICE, Special Agent-in-Charge, U.S. Food and Drug
Administration, Office of Criminal Investigations, Washington Metro Field Office, and MARK
J. MERSHON, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field
Office, and is the culmination of a year-long undercover investigation that included the use of a
cooperating witness who recorded his conversations with GLEASON, as well as GLEASON’s
presentations to prescribing physicians at continuing education programs and promotional events
sponsored by Xyrem’s manufacturer.

According to the indictment, the active ingredient in Xyrem is GHB, a powerful and fast-acting
central nervous system depressant that has been subject to abuse as a recreational drug and is
classified by the federal government as a “date rape” drug. Xyrem is capable of inducing sleep
very quickly and causing serious side effects, including difficulty breathing while asleep,
confusion, abnormal thinking, depression, nausea, vomiting, dizziness, headache, bedwetting,
and sleepwalking. Abuse of the drug can cause additional serious medical problems, including
seizures, coma, and death, and can also lead to dependence and severe withdrawal symptoms.
Xyrem’s dangers are set forth in a “black box” warning, which is the most serious warning
placed in the labeling of a prescription medication.

Federal law makes it a crime for anyone to introduce a drug into interstate commerce for a
medical use or “indication” that is not approved by the U.S. Food and Drug Administration
(“FDA”). According to the indictment, Xyrem is only approved for two medical indications, the
treatment of cataplexy, a condition characterized by weak or paralyzed muscles associated with
the sleep disorder known as narcolepsy, and the treatment of excessive daytime sleepiness
(“EDS”) in narcolepsy patients. The indictment charges GLEASON with conspiring with
employees of Xyrem’s manufacturer to market Xyrem for a range of unapproved or “off-label”
indications, including fatigue, chronic pain, weight loss, EDS not associated with narcolepsy,
depression, bipolar disorders, fibromyalgia (a disorder causing muscle pain and fatigue),
insomnia, and movement disorders such as Parkinson’s disease.

As alleged in the indictment and a previously filed complaint, Xyrem’s manufacturer, Orphan
Medical, Inc. (“Orphan”), relied on GLEASON to give lectures around the country promoting
Xyrem to physicians for “off-label” indications and paid GLEASON tens of thousands of dollars
for such speaking engagements. In 2004 alone, GLEASON spoke at over 100 events and was
paid more than $70,000. GLEASON was allegedly in high demand by Orphan sales
representatives because of his proven ability to generate “off-label” sales of Xyrem in their
respective sales territories. The indictment charges that GLEASON engaged in deceptive and
misleading behavior in promoting Xyrem by, among other things, suggesting to physicians that
GHB was not a “date rape” drug, and that Xyrem was safe for very young children when, in fact,
the drug’s labeling stated that Xyrem had not been proven safe and effective for people under the
age of 16. The indictment also charges that GLEASON conspired with Orphan employees to
defraud public and private health insurance plans by concealing, and advising prescribing
physicians to conceal, evidence that Xyrem prescriptions were being filled for “off-label”
indications that generally were not reimbursable.

“Illegal marketing of prescription medications for unauthorized medical uses is a serious and
increasingly widespread crime that we are committed to prosecuting,” stated United States
Attorney MAUSKOPF. “This case is particularly troubling, not only because it involves the
marketing of a medication containing GHB, a dangerous substance with a long history of abuse,
but because those marketing activities were furthered by a psychiatrist who, for financial gain,
willingly used his professional status to promote the use of the medication at the expense of
patient health and to urge other physicians to conceal those unauthorized uses from health
insurers.” Ms. MAUSKOPF thanked the Department of Health and Human Services, Office of
Inspector General, for its assistance in this matter and emphasized that the investigation is
continuing.

FDA Special Agent-in-Charge RICE stated, “The FDA does not tolerate the marketing of
products that use deceptive and untruthful claims to lure consumers into potentially dangerous
situations.”

FBI Assistant Director-in-Charge MERSHON stated, “Apparently motivated solely by greed,
someone whose moral and professional obligation was patient well-being engaged in a pattern of
promoting unproven and even unsafe uses of a potentially dangerous drug. That a psychiatrist
would engage in conduct indistinguishable from a carnival snake-oil salesman is appalling.”

If convicted, GLEASON faces the following maximum sentence: conspiracy to introduce a
misbranded drug into interstate commerce -- five years incarceration, conspiracy to commit
health care fraud -- 10 years incarceration, introducing a misbranded drug into interstate
commerce -- three years incarceration, and health care fraud -- 10 years incarceration. On each
count of conviction the defendant also faces a maximum fine of $250,000. In addition, the
indictment seeks a forfeiture judgment against the defendant of any and all property constituting
or derived from proceeds traceable to his offenses.

The government’s case is being prosecuted by Assistant United States Attorneys Geoffrey
Kaiser, Paul Kaufman, and Margot Schoenborn.

The Defendant:

PETER GLEASONDOB: 4/1/1953

_____________________________

1 The charges in the indictment are merely allegations, and the defendant is presumed
innocent unless and until proven guilty.

The Department of Justice believes that it is important to keep victims/witnesses of federal crime informed of court proceedings and what services may be available to assist you.

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